jump to navigation

Contra His Incessant Whining, Obama Was Handed an Economy in Recovery September 3, 2012

Posted by geoff in News.
trackback

From the outset, the Obama administration has pushed one primary message to the public. They have never wavered, never faltered, never stumbled in delivering that message, which we hear on a weekly basis. And for good reason – that message has been their sole defense against the reality of our miserable economy. That message is this:

President Obama inherited a disastrous economic situation from President Bush, and only his quick, decisive actions have kept the economy afloat.

To now, the counter argument has been that certainly 4 years should have been adequate for our current President’s policies to have erased his predecessor’s mistakes. But I’d like to make a different argument – one that has a mathematical basis, and which leads inexorably to this simple conclusion:

President Obama and his administration are full of hooey.

An explanation is probably in order. As you may recall, the GDP was plummeting like a stone in the run-up to the 2008 election. It didn’t actually bottom out until the 2nd Quarter of 2009, which is the basis for the Obamian claims that they saved the economy.

But all plummeting is not equal. Your rate of plummeting can be increasing, it can stay the same, or it can decrease. If you look at the real GDP data (thoughtfully provided below), you can see that from its peak in Q208, it started falling slowly, then more quickly, then very quickly, then more slowly, and then it hit bottom and started rising again.

When the GDP transitions from increasing its rate of falling to decreasing its rate of falling, we have what’s called an inflection point [in mathematical parlance, it's where the second derivative of the GDP = 0]. And that inflection point is where the economy is actually starting to turn around, i.e., where its rate of descent starts slowing.

You can see by eye kind of where that inflection point would be – about halfway down the plummeting part of the curve. But just to back it up with some math, I smoothed the data, applied a curve fit, took the 2nd derivative and found out where it equals 0.

And the answer is . . . . the last quarter of 2008.

Yes, folks, the economy had already started to turn around in the quarter before President Obama took office. The healing had begun before the Stimulus package, and before he started propping the economy up with huge deficit spending.

And by the time his policies did kick in? The economy braked like the President passing a golf course.*

The President has been hiding behind the “It’s all Bush’s fault” defense for four years. That excuse was always pathetic, but now we know that it’s untrue as well.

*A non-racist type of golf course not at all reminiscent of Tiger Woods

About these ads

Comments»

1. Nan G - September 3, 2012

For quite a while now I’ve been saying that Obama assumed that, no matter how he squandered all that stimulus money on cronies, the economy would recover anyway.
That’s why his ”with” stimulus curve was not so very different from his ”without” stimulus curve.
And, either curve, by this time, would have been looking pretty good for him.
BUT Obama’s policies were so business unfriendly that the unthinkable (to him) happened.
The economy sputtered.
His Plan B was to blame Bush.
But, as you so often point out, his man Timmy saw the writing on the wall and accurately predicted exactly what Obama’s policies would do to slow the recovery.

Thanks for your use of illustrations to make the complex more simple.
Now, get this to the RNC.
They’ve got wonks there who could make good use of it.

2. Michael - September 4, 2012

I am just atwitter with excitement, waiting for Romney’s debate performance where he explains second derivatives of GDP change to the American people.

It’s going to be a a brutal smackdown for Obama. He will be looking at Romney with slack-jawed amazement. Obama might even say something like “what the fuck, they told me this job did not include math.”

3. Anonymous - September 4, 2012

Bush Handed Henry Paulson (ironically of Goldman Sachs) the keys to the treasury months before Obama was even elected. Both the financial collapse and the plan to (barely) avert a depression were hatched on HIS watch. Bush was determined to hand his successor (widely assumed to be Obama at the time) a country unable to fight it’s way back to prosperity before the next two election cycles, and entrenched in two wars that we were contractually obligated by treaty to continue for the same amount of time. His (Rove’s, actually) goal: Simple. To weaken democrats ability to hang on to the Executive branch for more than one term. Congressional Republicans have followed the same game plan. PASS NOTHING of substance that would help the nations economy so the whole mess can be blamed on the Democrats. Anyone who doesn’t see this cant do math either. Oh, and you ought to look at some other math (simple arithmetic, really) as well. If the election were held today it would be an electoral college smackdown for YOUR boy, not Obama.

4. Anonymous - September 4, 2012

I’d want to be anonymous to if I was still sucking that dick.

5. geoff - September 4, 2012

If the election were held today it would be an electoral college smackdown for YOUR boy, not Obama.

Are you calling Obama a boy?

Racist.

6. geoff - September 4, 2012

I am just atwitter with excitement, waiting for Romney’s debate performance where he explains second derivatives of GDP change to the American people.

Now see – it took me a long time to decide to write this post just because I knew I’d be taking flak for using a little calculus. But dang, it sure undermines that whole “The economy was worse than anybody knew, and it’s all Bush’s fault” tripe.

7. daveintexas - September 4, 2012

Man, if Obama let the idiot Bush roll him, he’s even dumber than I thought (and I was pretty far out there on “dumb” already).

“George Bush Stole My Lunch Money: 4 More Years!”

8. Michael - September 4, 2012

Just teasing you Geoff. A little calculus won’t cause anybody’s head to explode (except maybe Dave).

9. JP - September 4, 2012

@Anonymous v.1.0: So what is your?Obama’s excuse for the first TWO years of his term when they controlled everything. I am sure that was in Rove’s calculus as well, right? 10th dimensional chess and 4th order differential equations and all….

10. Truman North - September 4, 2012

No, I need no mathematical explanation to reinforce your opinion that the Obama administration is full of hooey– it’s self-evident. :)

11. Andy S. - September 4, 2012

Would it not also be a good thing to bring up the cause of the recession in the first place?– as well as which party’s policies caused the recession and the attempts the Bush administration made to avert the economic meltdown– all prevented by the Ds? It seems I don’t hear this enough. The Dems caused the mess, prevented Rs from correcting the mess, then blamed the mess they caused on Rs, and after gaining power and adding to the mess they made which prevented a recovery, continue to blame it all on the size of the mess the Rs caused. I understand there’s plenty of room in hell.

12. Andy - September 4, 2012

>> For quite a while now I’ve been saying that Obama assumed that, no matter how he squandered all that stimulus money on cronies, the economy would recover anyway.

Bingo

13. Michael - September 4, 2012

The real problem with Geoff’s post is that it won’t interest anybody in Chad or South Sudan, flags we have not gotten yet.

We need a post entitled “Smoking Hot Chadian and Sudanese Babes” with appropriate pics.

14. daveintexas - September 4, 2012

Bingo.

Let’s run with that. Self-interest is a powerful motivation, whether you are a business or an individual. Heaping coals of uncertainty in a marketplace makes the self-interested hunker down. You don’t buy that new car. You decide now is not the time to invest in expansion without firm contracts in hand.

You ride it out. Rising energy prices, hostility from an overbearing and intrusive government, this shit calms you the fuck down and makes you hang on, makes you “wait and see.”

Democrats can cry about selfish “profit-seekers” and shipping jobs overseas all they want, that’s just fucking noise anyway. They will not change survival behavior. “Going Galt” is a very powerful response to an oppressive climate of “fuck you markets we the deciders will decide what you can have and do”. It’s usually “thanks for all the attention, but get out of my face”

15. Teleprompter - September 4, 2012

Very interesting article. I’ve had a theory since the 2008 campaign: McCain lost on purpose. If he had won and no matter how much the economy improved, the MSM would kill him. In 2010, the elections would have swung even further left, and in 2012 a Democrat in office would be able to do anything he wanted for 4 or more years. It would be a long time before Republicans got control of Congress again.

Once criticism of Republicans is that they are in the pocket of big oil. Obama claims that domestic oil production is the highest it has ever been. The price of gas and oil are also at historic high levels. Doesn’t that equal higher profits for the oil companies? According to him, they are doing much better now than during previous administrations.

16. Michael - September 4, 2012

I’ve had a theory since the 2008 campaign: McCain lost on purpose.

Hard to understand how any sane person would have wanted the job in 2008.

Unless you were just planning to spend the next four years improving your golf game, before retiring to reap lucrative speaker’s fees at union conventions.

17. Bill Hedrick - September 4, 2012

One should also point out that the dems controlled the house and senate from 2006-2010. I think that is more critical, also that Bush basically checked out in 2008 and went along with whatever the Congress and Senate sent to his desk

18. David Stewart - September 5, 2012

Isn’t the turnaround where the first derivative, not the second derivative, changes signs? When did that happen?

19. geoff - September 5, 2012

Isn’t the turnaround where the first derivative, not the second derivative, changes signs? When did that happen?

No, that’s the minimum of the GDP where the slope changes from negative to positive. The second derivative tells you when the rate of change of the slope goes from positive to negative, not the slope itself. Thus, it tells you when the crash started slowing.

20. Mike O'Malley - September 5, 2012

Regarding #3 by Anonymous on Sept 4 above.

Congress not POTUS has the primary authority for appropriations under the US Constitution. Sen. Obama along with the Democratic majorities in both houses of Congress gave Pres. Bush the TARP funds. The financial crisis was hatched by Pres. Clinton but the vulnerabilities causing it were structured into the US economy and institutions by FDR, LBJ and Carter. The financial crisis of 2008 had two triggers, neither of which were the responsibility of Pres. Bush, 1) the FED and all major central banks around the world pushed up interest rates in 2008 when they should have lowered them, 2) The European Basil II bank capital requirements (European bank regulations) both inflated and then burst a worldwide real estate bubble.

And while Anonymous might have assumed Sen Obama would win the election at that point in 2008 it was actually touch and go until Sen McCain blew it by mishandling his campaign response to the financial crisis.

All competent authorities and the Obama administration expected the US economy to enter a robust recovery during 2009 based upon the 2008 response to the crisis.

Since Congress not POTUS has the primary authority for appropriations under the US Constitution, and since Sen. Obama along with the Democratic majorities gave Pres. Bush the TARP funds, it is wildly unlikely that those Democratic majorities would join with Pres. Bush to hand his successor a country unable to fight it’s way back to prosperity before the next two election cycles.

21. Rick - September 5, 2012

Can you clarify on your chart when BHO took office? I can’t from this chart if the fiscal year is the same as the calender year or if is shifted 1 qtr. thankss

22. geoff - September 5, 2012

GDP is reported on a calendar basis, so 2009Q1 (the quarter when President Obama took office) is just Jan – Mar 2009, like you’d expect.

23. Pap Pap - September 5, 2012

With all of the Obama whining about the jobs lost because of Bush I would like to know just how many of them were after Obama was elected and before he took office because the economy was scared of what Obama was going to do to it.

24. Randall Hoven - September 5, 2012

Geoff, my guess is if you do the same thing around 2000-01, you’d find Clinton left a recession for Bush. (Decelerating GDP.)

By the way folks, the second derivative is acceleration. In mechanics, an external force applied to a body causes that body to accelerate. So measuring the 2nd derivative is like measuring the external force (e.g., what a President does) on a body (the economy).

(Between us girls, I’m not sure quarterly is a high enough sample rate to estimate a 2nd derivative with much accuracy. But I’m willing to squint my eyes.)

25. geoff - September 5, 2012

I’m not sure quarterly is a high enough sample rate to estimate a 2nd derivative with much accuracy.

That’s certainly an issue. Another choice is to pick a point halfway between the peak and trough as a rough estimate. If you pick the peak as 2008Q1 (although there’s a depression in the curve there, I’m assuming that’s anomalous) and the trough as 2009 Q2, you end up with a halfway point of the midpoint of 2008Q4. You can compare that value (~ Nov. 15) to the value I calculated (~Dec. 1).

Pretty close.

26. Wednesday morning must-reads at Class War Watch - September 6, 2012

[...] Did President Obama actually inherit an economy in recovery? [...]

27. zombre - September 6, 2012

characterizing the inflection point as the bona-fide point of healing is a stretch. It just signifies loss in the bleeding rate. Even a dying soldier would go through this inflection point. The economy was revealing its true non-bubble core during those quarters

28. geoff - September 6, 2012

It just signifies loss in the bleeding rate

Which is a critical point, when you’re asking yourself “when is the bleeding going to stop?” Based on the history of recessions since WWII, our soldier never dies – he usually recovers at a rate comparable to the rate at which he was injured. So the inflection point is indeed the first light at the end of the tunnel.

Certainly the trough is too late – you’ve started turning the economy around before you hit bottom, or you wouldn’t hit bottom. So somewhere between the peak and the trough you start recovering – which point would you pick?

29. Michael - September 6, 2012

When the blood flow slows, i.e., the inflection point.

Following which, a robust recovery is the normal experience. We recently saw this after the 2001 recession.

Obama didn’t cause the 2008 recession, he just retarded the recovery.

30. Michael - September 6, 2012

I’ll bet that Obama was counting on a recovery to make him a hero, which led to the hubris of Obamacare and the stimulus spending, and so he threw a monkey wrench into the economy and the political environment.

31. lauraw - September 6, 2012

Remembering Christina Romer’s statements of surprise that businesses simply failed to start hiring again.

*sigh*

Yep, so glad the place is being run by the Smart People.

32. We The People USA - September 6, 2012

Today’s survey: Obama’s 2013 budget proposes over $1.3 Trillion ($1,300,000,000,000) dollars which continues to increase our deficit. This continues to explode beyond the total earning capability of the 1%, 2% or 99% of the population. Should Obama be reelected in 2012? http://tinyurl.com/6ojgpz6

33. daveintexas - September 6, 2012

Why are all these fat Democrats telling me they can run my life better than me?

LAY OFF THE CHEESEBURGERS, MAYBE WE’LL TALK

34. lauraw - September 7, 2012
35. Obama’s Economic Successes: A Roundup « LEADING MALAYSIAN NEOCON - September 12, 2012

[...] Via AoSHQ from Innocent Bystanders: [...]

36. Instapundit » Blog Archive » THAT DOESN’T FIT THE NARRATIVE: Contra His Incessant Whining, Obama Was Handed an Economy in Recove… - October 13, 2012

[...] THAT DOESN’T FIT THE NARRATIVE: Contra His Incessant Whining, Obama Was Handed an Economy in Recovery. [...]

37. aardvarkomega - October 14, 2012

i remember glancing at gdp projections for 2009, when he walked into the office…to see what par for the course was…

in january 2009, the consensus projection was for 1.6% growth in the third quarter. before the stimulus was even announced.

we got 1.9%, (chained 2005 dollars was 1.4%.)

38. aardvarkomega - October 14, 2012

one other ingredient that strikes me as strange…

2009 gdp, 13,974 billion.
2011 gdp, 15,076 billion.
(not adjusting for inflation)

throw in three years of the 409 billion omnibus passed in 2009, add in the stimulus at 831 billion, and obama, on these two expenditures blew over two trillion.

our gdp only grew 1.1 trillion. haven’t heard a lib mutter the word ‘multiplier’ in quite some time.

the irony is that if they take the cheese to defend the fantasy belief of a multiplier, they are just pointing out that the actual underlying economy is experiencing negative growth.

39. aardvarkomega - October 14, 2012

last point, for me…

obama inherited a 1.004 trillion dollar deficit. the 2009 omnibus pushed it to 1.413 trillion.

if reelected, he will experience a larger deficit than he inherited.

last time around, the deficit was a crisis. now it is the ‘new normal’.

40. geoff - October 14, 2012

throw in three years of the 409 billion omnibus passed in 2009, add in the stimulus at 831 billion, and obama, on these two expenditures blew over two trillion.

I don’t worry about the stimulus money so much any more. It’s dwarfed by the deficit spending that is propping the economy up. The President needs to be held accountable for the entirety of that spending, which was Stimulus by Executive Order.

41. Rich Rostrom - October 14, 2012

To be fair – Obama launched his Presidential campaign in 2007. That was before the wheels fell off. So it is not true that he started out to take on an economy in crisis.

He was already the Democrat nominee when the crunch hit, and it would have been cowardice to run away. (Also an admission that his Lightworker’s powers were insufficient for a problem, something the One is not capable of.)

42. geoff - October 14, 2012

Obama launched his Presidential campaign in 20072004

Fixt it for you.

So it is not true that he started out to take on an economy in crisis.

But he certainly embraced the opportunity when it arose.

43. Larwyn’s Linx: Who’s ‘Politicizing’ Benghazi? | Preppers Universe - October 15, 2012

[...] and Oranges: ElephantA Modest Proposal To Ensure California’s Rich Don’t Leave: WilliamsContra His Whining, Obama Inherited a Recovery: BystandersObama Owns Shares of Sensata, Outsourcers to China: Sooper12 Obama Debate Lies And [...]


Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

Follow

Get every new post delivered to your Inbox.

Join 192 other followers

%d bloggers like this: